tv The Kudlow Report CNBC January 7, 2014 7:00pm-8:01pm EST
against that ram company. its earnings are explosive. that's the look right now of m.u. there is always a bull market somewhere. i promise to find it for you. i'm jim cramer and i will see you tomorrow. extended jobless benefits will surely pass the senate after today's procedural victory, but the outlook for the house, murky. and i question the true benefits of these extended benefits. finally, why not just abolish the corporate tax or at least slash its rates? that would be the key to growth and jobs and wages. and then energy imports plunge. that brought down the november trade gap. we are producing our own energy independent boon. you know what, as the trade deficit narrows, king dollar goes up, inflation stays muted, the economy grows faster and stocks really benefit as they did today to the tune of over 100 points.
and the great show "shark tank" on cnbc tonight is all about the entrepreneurial spirit that made america great, but government regulations and high taxes may be killing these small businesses. we're going to talk to one of the sharks about the whole story. all those stories and much more coming up in "the kudlow report" beginning right now. good evening, everyone. i'm larry kudlow. this is "the kudlow report." we're live at 7:00 p.m. eastern, 4:00 pacific. the unemployment benefits all the guarantee in the senate. will this jobless bill pass the house? president obama gathered his own people for his own push in the white house. here to report everything let's go to john harwood for all the details on the president and the outlook, good evening. >> good evening, larry. it was a surprise vote in the
senate breaking ins that filib. the president at that event at the white house acknowledged economic arguments that said extending the economic benefits too long keeps people out of the labor market. he says it's simply not true. >> now i've heard the argument that says extending unemployment insurance will somehow hurt the unemployed because it saps their motivation to get a job. i meet a lot of people and i can't -- i can't name a time where i met an american who would rather have an unemployment check than the pride of having a job. >> now it's still unclear though, larry, whether or not this is a campaign trail argument for the president and fellow democrats to make up to mid term elections or something that could actually happen. passage in even the senate is not guaranteed and the house is insisting on paying for any
extension of benefits, which would be $6 billion if it's three months, $25 billion if it's a year. when you think about how difficult it was for paul ryan and patty murray to agree on a $63 billion two year budget packa package, very difficult to see how they're going to make a deal on this. it could be both sides positioning on this from now until november. >> it's a very interesting issue here. on the pay fors. i just want to go to the house for a mint. boehner is being quoted. he wants keystone xl piech line as one of the pay fors. he wants energy drilling on land as pay fors. i would call them conditions. what are you hearing on that? >> well, you're right. those are conditions. mitch mcconnell offered another one, delay the individual mandate on obamacare. he proposed to roll back some parts of that ryan/murray budget deal. it's not strictly about money. in terms of other pay fors, they'd like to take money out of
obamacare which the administration is not going to agree to do. as long as we're talking about things that are either irrelevant or unachievable from the republican perspective, we could just see both sides digging in for a long fight. >> all right. john harwood, thank you very much. we appreciate it. now folks, one senator who voted against the jobless bill is senator ron johnson. welcome back to the show, as always. let me just ask you -- >> hello, larry. >> -- right away. the national -- nber, national bureau of economic research. highfalutin blue chip think tank of economists. they just did a study that said the reason unemployment is so high is because we keep extending these unemployment jobless benefits. the president says no. what say you? >> president obama's former economic advisor, larry summers, issued a study before he became his advisor that basically said the same thing. larry, i was talking to a painting contractor in
wisconsin. he said, do not extend unemployment. he finally got two big jobs, went back to his laidoff workers. to a person he would not take the job. until our unemployment benefits run out, it doesn't pay for us to do it. to add insult to injury, he lost those jobs, guess to who? those same workers did those jobs for cash. listen, we're all concerned about people who are long-term unemployed. that's obviously not the typical rule, but the best thing, the best solution is to get our economy growing so we can provide people real jobs so they have the dignity to work. that's what this -- that's what this president is signaling unable to do. >> how would you recommend doing that? the economy is improving. i know a lot of -- the unemployment rate is too high. the marginal unemployment rate is even higher. close to 14%. i know the population, the employment to overall population is way too low, 58%. senator johnson as a former ceo yourself, what would you do to
really put some torque into the job story so we don't have to worry about extending benefits? >> we have to reduce the regulatory burden. costs $1.8 trillion a year to comply with. that's a number larger than all but 80 countries in the world. you have to have a competitive tax environment. you mentioned keystone xl pipeline. you would put people to work. it's not rocket science what we have to do, but politically with this president, he's not willing to do those things. he'd rather have the political issue, and that's a real shame. >> who politically how will you other republicans counter act or rebut or during the white house and harry reid and people will say republicans are grinches, they're mean, they have no heart. what's your reaction to that? >> first of all, harry reid has to allow us to offer some amendments to improve this bill. first and foremost, it has to be paid for. $6 billion-the easiest pay for,
the murray/ryan budget deal. patty murray got $22 billion of additional discretionary spending. use $6 billion of that. that's the easiest pay for. if democrats think this is a high priority spending item, they should spend 6 billion that have $22 billion on this item. they are refusing to do that right now. we'll see how this thing plays out. >> i always wondered, senator. if you're going to help them, why don't you do it directly, transparently in the budget either by increasing the earned income tax credit or just by providing a weight subsidy. if you're going to help them, it seems to me extending benefits or raising the minimum wage are highly, highly inefficient putting the burden on business. you know benefits. benefits are expensive. you pay for the benefits out of the payroll tax. why don't you give them the earned income tax credit. >> the other aspect is from the federal government, we really shouldn't be in the unemployment insurance business. that's really a state issue right there paid for by payroll
taxes at the federal level. we're four and a half years into recovery. at what point does the emergency end? at what point do we keep going temporary extensions of this thing. maybe this is the point in time to do that. >> this would be the 11th extension and you're quite right in the four and a half of the fifth year recovery. >> let me go back to the op ed piece from the wall street journal. you are bringing a lawsuit against the federal government or justice department. you want the congress people not to be exempt. can you summarize that view? >> sure. the special treatment members in congress are getting when they lose their employer sponsored care like millions of americans are, that's going to be the next wave. americans losing their employer sponsored care. when those americans go get their insurance, they'll have to deal with after-tax dollars. members of congress, they get
tax preferred contribution by the employer. that's the special treatment. that's unfair. oh, by the way, the president does not have the legal authority to change the law. if he wants to change it, come to congress and pass a new law. so it's really about upholding the rule of law and just basic fairness. >> isn't the federal health care plan available? i mean, i was in the executive branch for a while. doesn't that thing have, a, many more choices than obamacare and, b, the government in effect provides lucrative subsidies but not only to members but staff who make six figure salaries? >> remember, the reason congress is in this pickle is because the democrats were trying to sell obamacare to a very skeptical public. in order to do it they said we'd be happy to get our insurance through the exchanges, we'd be happy to follow the rules and regulations. they were eager to do that until they realized what they did to themselves. they prevented themselves from getting an employer contribution. nobody else can get that through
the exchanges. they deemed the federal government is a small employer so they can get their insurance through shop exchange. this is so convoluted and so wrong. it should be overturned. president obama wants to change the law, he should do that. he can't do it through presidential dictates. >> i love that that this is a small little business government spending 3 poi$3.7 trillion a y with the combined payroll of 4 million people. that's a great metaphor. senator ron johnson of wisconsin, we appreciate it. coming up on kudlow, two economists will debate this unemployment extension discussion. is it going to help or hurt the economy? why don't we abolish the corporate tax. that would help workers hiring and wages. we'll have art laffer around jared bernstein up next on kudlow. coming up next, the administration being very cagey about obamacare enrollments. now just how many people signed
up? were they old? are they young? are they sick? are they healthy? all this very important information and some members of congress are demanding transparency and it's like pulling teeth from the white house. and "shark tank" come to go cnbc tonight. it's coming to "the kudlow report" first. it's about entrepreneur ship, free market capitalism, may i say more. entrepreneurial capitalism. always the best bet to prosperity. i'm kudlow. please stay with us. [ male announcer ] we could say a lot about the most track-tested is ever... but the truth is... we don't have to. the experts have spoken. now it's your move. ♪ now it's your move. i'm bethand i'm michelle. and we own the paper cottage.
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all right. one more point about this whole unemployment extension business. does it create incentives not to look for work? aren't there better ways to promote economic growth? here's jared bernstein and art laffer, economist and former ronald regan advisor. will this help or hurt? >> i think it will hurt. you have to have some unemployment benefits, we all know that. this is an extension for a long, long time. it was meant to be temporary. if you pay people to be unemployed, there are going to be more people unemployed. we all know that.
the question is how large is it. you know, it's clearly going to hurt the recovery. >> i mean, jared, before you tell me i'm crazy, president obama has basically said the same thing today -- >> you're both crazy. >> all right. we're both crazy. here it is. the national bureau of economic research, the blue chip ivy league economists and researchers, they write a paper and say all of this extending of research has made unemployment harder. >> i know the paper and i can cite about five that go the other way. this is one like the minimum wage, you can pick the paper you want to get the result you want. i will say that just like the minimum wage, in fact, the wealth of the evidence suggests that in a down economy unemployment insurance does not have the negative effects you're talking about and so the question that we should be arguing about is just how good, how healthy is the labor market. now by one measure the share of long-term unemployed, that's
about 2.6% of the labor force right now is twice the share that it has been in the past when congress has allowed these expirations to occur. by that metric the labor market still has a way to go. >> yeah. my view, larry, why not raise it to $100,000 a year, the unemployment benefits, then we can really improve the economy. just joking. >> that would be a budget buster for sure. >> that's joking. >> thank you for that. they were worried about a $6.5 billion pay for. in all seriousness, there are so many other ways to do this. >> yes, of course. >> extending unemployment insurance for the 11th time is not a growth member. >> no, it's not. >> not a jobs creating measure, everybody knows that. i don't know if you saw the op ed piece from larry kotlikoff. he's no supply sider. >> no, he's not. >> he said you want to create jobs, you want to hire more, raise real wangs, abolish the corporate income tax because
it's just a pass through and it comes out of wages and it causes consumer prices to be higher. now that -- why isn't washington thinking in those terms, art laffer? put some growth torque into the conversation. >> some people think that way. bipartisan people are thinking that way. there is darrell issa jared pollis talking about cutting the corporate tax and broadening the base. i think jared would agree with that. we should try to get growth back into the system, not keep going on and on and on on raising unemployment benefits. you know that raising unemployment benefits does not reduce unemployment. it really doesn't. >> here's the thing. i heard you having this conversation with senator johnson as well. some of the things you were citing like the earned income tax credit, that doesn't help you if i don't have a job. in terms of the corporate tax rate, i mean, first of all, if you think abolishing the corporate tax rate is anywhere near the docket, you're way off. now lowering the corporate tax rate and broadening the base, that's a plan that the white house has agreed upon.
that's not going to happen any time soon. >> jared -- >> the three of us can agree. extending unemployment, that might happen soon if we get our heads on. >> jared, the earned income tax credit will get people to take jobs that they otherwise wouldn't. >> thank you. thank you. >> it's not whether they have a job and get it. that's static thinking. you want to get the incentives there. >> art is right. look, the argument, right, they don't want to take marginal employment. >> that's right. >> do the earned income tax credit. you could give them a wage subsidy. but it would be at least transparent and a form of spending. when you go down this route, jared bernstein, you have to increase state payroll taxes or if you go the minimum wage you're ordering businesses to accept higher costs. both of those are antijobs. both of those are antigrowth. i'm saying there's many better ways to do this if you want to do it. >> okay. but first of all, let's be clear. if you think that a higher
e.i.t.c. payment drops from heaven and it doesn't show up as foregone -- >> it's not foregone revenues. >> that's not a free lunch either. >> if you get the guy to take the job and he works more, he'll pay less revenues but it won't be foregone, he'll have job and payrolls that he otherwise wouldn't have had. >> first of all, it's a tax credit. i'm arguing with two supply siders. we have a very different underlying fundamental a sung assumpti assumption. if you make the jobs better people will take them. what i'm telling you is that the job market is still too weak for all the comers. >> because of this. >> there's not enough chairs. >> that's because of this, by the way. not in spite of it. >> three unemployed per job opening. >> that's why it is. >> who's to blame for that? that's an important factoid. after nearly five years and 11 extensions, you, jared bernstein, obama advisor, biden
advisor, and a lot of other people, jason ferman, the others, they're all saying it's not good enough. if you do something 11 times and it's not good enough, maybe it's time to rethink your position, ole buddy. >> exactly. almost the definition of being crazy. >> i like the way you frame that up. i think that's a very reasonable way of putting it. what i'll say in response -- what i'll say in response is that the job market is clearly improving. when obama and jason ferman and i -- >> oh, no, it's not. >> no, the job market is. the unemployment rate is coming down. >> the participation rate has fallen with it, jared. >> don't conflate an improving job market -- >> no, come on. as larry said in the opening segment, employment is a share of population is at the lowest point ever. it is not improved. it's not going down any further, but it's not improved. >> i just want to say one other thing -- >> no, it's not. >> jared, i know you think i'm nuts about this but, listen,
larry, we're going to get him on, he's in moscow, but the whole idea of either abolishing the corporate income tax, which is my first choice, that sounds farfetched, the corporate income tax, corporations don't pay taxes, people do. it's a pass through. the whole thing is a pass through. when corporations have to set aside money for temporary tax increases, they take it out of wages. >> so here's -- >> they take it out of wages. let me finish. they take it out of wages. you know who else pays? consumer prices go up. if the corporate income tax is a led weight around the feet of our economy and one that we should get rid of, move on and do something else. >> two things. two things. first of all, i used to work in the white house. i saw a lot of corporate titans come m and ask for a tax cut. it was not on behalf of their workers. the incidence on corporate taxes is thought to be on taxes and labor. we have a long history of cutting corporate taxes. it doesn't correlate with job growth at all. >> what?
>> yes, it does. >> what? >> it doesn't correlate with job growth at all. >> oh, come on. i don't know what papers you're reading, jared, but all of the ones that i read from your team say it does. look at romers work, all of it. >> i will make a graph for you of changes in corporate tax against corporate employment and put it in my blog. >> j.f.k. cut the corporate tax rate and reagan. >> clinton cut it very well and did a great job. >> let's cut the corporate tax rate -- >> and obama raised them. obama has a plan to cut it. >> it would help labor more than capital. that's larry. that's why this is an interesting study. i pushed it. this is the second night in a row. i'm not going to obsess about it every show. larry kutlokoff is not a card carrying guy. as far as the ceos na went through the white house, don't get me started. that is crony capitalism.
firefighters charged with faking illnesses and defrauding disability. cnbc's own jackie deangelo joins us with the details. >> cyrus vance jr. announces the indictment of 106,000 people. according to the allegations, police and firefighters falsely claimed stress-related illnesses to pocket tens of millions of dollars in disability benefits. many of the suspects also received 9/11 pensions according to sources. now the list of defendants released from the d.a.'s office includes the men who allegedly orchestrated the scam who are police officers, firefighters, and the claims totaled as much as $400 million. pictures were released of several of the suspects who received hundreds of thousands of dollars in benefits clearly
being active when they were saying obviously that they couldn't. one suspect, richard cosentino is seen in this picture, sword fish fishing. he was called to several associations that represent current and former nypd workers were not there as well. they say the disability safety net is there to help those who are unable to help themselves. many cynically plf icallally ma claims of mental illness. really terrible story. >> the dishonor part is really important here. i'm glad you mentioned that. i'll just put a plug in. i know sy vance pretty well. he'll pursue this. >> jackie deangeles, tough story but great reporting.
up next on kudlow, the obama administration remains mum on who's signing up for obamacare. if that isn't bad enough, they're taking credit for health care that their own cms agency says is not accurate. we have a lot of work to do tonight. i'm kudlow. please stay with us. aflac! aflac! got 'em. ♪ yeah, he's clean, boss. now listen to me, duck. i have an associate that met with, uh, an unfortunate accident. while he's been incapacitated, somebody's been paying him cash. now, is this your doing? aflac? now, if i met with some such accident, would aflac pay me? ♪ nice. this is your stop. [ male announcer ] find out what aflac can do for you and your family... aflac? [ male announcer ] ...at aflac.com.
welcome back to "the kudlow report" so want to hear some serious white house dissembling and dissidence? first they can't say how many young people signed up for obamacare and then jason furman says obamacare is slowing down health care inflation. this despite the white house jay carney sticking with the white house line. listen. >> for years health care costs in america skyrocketed with brutal consequences for our country. the affordable care act for the first time in decades has helped to stop that trend. joining me, jim capretta, with health programs. i'm a fan of jason furman, he's a good guy. i like him very much. it seems to me he went way too far because the cms only
yesterday came out with a piece and said basically you know what it was, drug patents were running out. that accounted for most of the so-called health disinflation. so who's right here, jason furman or cms. >> cms. this slow down, first of all, it's mostly associated with the recession. there's been a worldwide slow down all over the united states and the world. i don't think the president wants to take credit for that. that was due to a very deep recession and financial crisis. every time there's been a slowdown in an economy, there's a slow down in health spending. the other factor which they never want to mention is that health savings accounts have taken off in a big way. legislation was signed by president bush in 2003. those have gone from 1 million enrollees to 15 million today. lots of employers are pushing those on to their workers. frankly, it's the advent of
health savings accounts that's more likely responsible for structural change in health spending. >> because of the added competition which brings prices down, is that fair? >> added competition and frankly the fact that consumers are spending their own money on sort of the routine care. if they have to shop around for care, which health savings accounts encourage them to do, they find better prices. >> no third party payments. the last one on this and i have other topics for you. jason furman says obamacare is responsible for slowing down medicare costs and especially hospital costs. do you have a thought on that? >> well, the irony is in that piece in the "wall street journal" that jason penned, he tries to account for it in the quality initiatives and accountable care organizations. that's not what happened in obamacare. there are cuts in obamacare in medicare. these blunt across the board cuts in hospitals, in the
private insurance care of medicare advantage. they are deep. r5 $00 billion over a decade. $700 billion with a couple of years added. those cuts won't improve the quality of care. the same actuaries say they'll drive hospitals out of the medicare program. this is not a cut they want to take credit for. >> i'd prefer that to obamacare. that was the intent from day one seems to me. you're right. that's a slam in cost cut. why won't the white house release any data about the demography of the people who signed up january 1st? as you know, everybody is concerned about young people, young healthies. why won't they release it? >> i don't want to assign motives of them. they have controlled the information carefully. obviously they release information that's beneficial to them and they don't when it's not. it's pretty clear from even a
cursory examination of some of the data available from the state exchanges that it's tipping closer to the older. there's 26,000 people that have signed up for insurance plans. more than half are over 44. 45 to 65. only 20% were in that key age group of 18 to 34. that's reflective of what's going on around the country and it probably is, look, if you were unhealthy and you were going to get subsidized insurance through obama care, that was going to be a good deal. of the 2 million people that signed up so far, there's a great suspicion that a large number are of that category. >> switch gears to the important social aspect of this. you are writing today in the national review about the contraceptive mandate that you believe violates religious liberty. the little sisters of the poor, so religious group, little sisters of the poor, my god, if
anyone does the lord's work, they do the lord's work. they're under attack for this obamacare contraception mandate. the thing's in the courts. they may wind up getting sued. it is inconceivable to me given all the mandates that have been changed, the business mandate, the small business mandate, the deadlines for this and the deadlines of that. they have to go after the little sisters of the poor. that to me is unbelievable. >> it is unbelievable. it kind of shows how ideological this particular fight is. i think they did it for electoral reasons. they wanted a divisive social issue to drive a certain segment to the polls in 2012. now they're stuck with what they've done and they don't want to compromise for fear of alienating that part of their base supporters. they have written an accommodation, what they call an accommodation to the little sisters of the poor. it is no accommodation. it essentially entangles that religious order and many others in providing many things through
their insurance plans through their workers that they don't want to do. it would be very easy and consistent with our tradition in this country to exempt all religious organizations who have an objection from this. >> right. >> it would affect many people. it would have no consequence socially whatsoever. they're doing this to make a point. >> contraception is so cheap and so available everywhere for heavens sake. how does this play out though? in the courts. courts take a while. what happens in between? >> you know, fortunately many of the lower courts, but not all, have granted many of the religious employers who have filed suit. the little sisters in the supreme court, many other similarly situated groups have gotten injunctions from lower courts for stalling this imposition while their cases are being heard. unfortunately, some big institutions like the university
of notre dame did not get a stay and they are living under this rule frankly in violation of their religious liberty rights while their case is being heard in the district court in the midwest. this is an unfortunate turn of events. what's really tragic is this is one of the most cherished rights under the country. >> it's not just a catholic thing, it can be any religion. it's about religious liberty. >> exactly. thank you for this. >> absolutely. >> god bless. jim cabrerra. god bless the little sisters of the poor. to take after a religious order like that is unbelievable to me. up next on kudlow, booming energy production and plunging energy imports. they're both closing our trade gap but strengthening the dollar. they're driving stocks higher. a lot of good news. we'll be right back to explain it. ♪
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announcements from yahoo and sony. yahoo ceo marissa meyer saying tumble are is going to have ads. sony announces that they're going to do an internet based tv venture. the ceo is telling me he's not necessarily trying to compete with cable but trying to solve the problem of tv in this multi-device landscape. also several other announcements across wearables and audios. larry, back to you. all right. many thanks, jon fortt. folks, i have good news. stocks back in rally mode today. dow up 106 points, nasdaq added 40. s&p surged 11 points. plunging energy imports. that's from our energy independence. think shale and fracking.
that leads to stronger king dollars. that leads to lower inflation and all of that leads to more growth. it's amazing. rebecca patterson was on. we were talking about this whole story as a what if. then it happens in today's report. all stuff that's good for stocks. i don't want to get irrationally exuberant, but nonetheless let me go to my investors, stephanie link of "the street" and tmichal osanian. what do you think, steph. >> if you go back, gdp was running 3%, much better than 1.5, 2% that people are looking for. the big surprise, larry, is on the earnings side, the revenue growth. traes driven by the better economy across the board, manufacturing, consumer, housing, auto continues to be
strong. i think that washington kind of getting out of the way will lead to a little bit better confidence. we've seen consumer confidence move up. we haven't seen the business confidence come up. that's going to be your story for 2014. we'll have better international growth. all of that pulls into a little better top line. people are expecting that. >> top line. profits. let's come back. before energy independence. we were producing so much energy. diesel fuel is being exported. not only did imports of energy drop, plunge, exports of american energy like diesel fuel that we don't need because of the more efficient cars and so forth, this is a long playing record, it seems to me. this story is a long playing record. this is not a 45, it's a -- do i
remember this? whatever. >> you know why, because it's technology driven. not because all of a sudden this one big find and there's only so much supply there. this is technology driven. you talk about fracking. you talk about shale and all of that. this is really coming from innovation. a lot of it is coming from the big oil companies which are really driving this. i think, yes, it is going to keep costs down. for the overall market, i agree with stephanie. i think not only do you have earnings coming from revenues but balance sheets for large corporations are so strong right now, larry, you're talking about share buy backs, you're talking about a relatively low percentage of earnings being paid out in dividends. so there's more room for dividend increases. i think those three things combined are going to give us a very bullish stock market for big cap stocks in 2014. >> i'm an optomist. i don't want to get irrationally exuberant. i doubt very much we'll get another 30% gain this year. >> i agree, no. >> here's my next question.
given your optimism. we have to see it in capital spending. >> yes. >> nonetheless, interest rates are going up. what is the impact on the market? >> i think it's the velocity of interest rates. we went from one six to two eight in a six, seven month period. i think we can hand that will if the economic data is supportive. that. we can't go skyrocketing higher than 4 to 5%. i think you will have head winds. >> ten years go to 4%. >> but economically it's okay, i think that's okay. again, i think the speed with which is very important. if you want to own the company, there he is a steeper curve. that's banks. that implies the economy is better. they'll lend more and they're more profitable. again, it imprice that the
economy is stronger than expected. technology has been lagging. >> i've seen people touting tech and telecom. i've seen a lot of people talking about that. what i'm asking is in a rise interesting rate market, what do you play? how does one invest? or does that not matter and you just sort of stay with what you have? >> i would stay with bonds. i think i would go to big cap stocks. with this five fold increase in the monetary bases done, it kills startup businesses and it kills small businesses. you'll still seal small economic growth because small businesses and startups, that's the engine of the economy and engine of job creation. you won't see 3.5, 4% economic growth. you won't see a big pickup in the cpi. >> you won't get cpi, but what about these cheaper energy costs. that's a tax cut on the economy.
crude oil, it's coming down. that's kudlow prediction. >> that has gone away. that's also with the tax cut. >> so why not? why not have stronger growth? in other words, if you have the dollar really strong, particularly in the '90s, the dollar was strong, that was great for stocks. >> one thing. the u.s. market, if you really want to find a better bang for your buck, the sectors that i mentioned still have room to go. if you look at europe, japan and china, on a valuation basis, those countries are trading much cheaper than the u.s. what i think you should do is own u.s.-based companies with international exposure that have the continuing policy. you have good growth here as well.
i think you with buy those global international companies. >> thank you michael and stephanie. we appreciate it as always. we're about ten minutes away from the debut of "shark tank" here on cnbc. it celebrates the american dream. starting a business, becoming an entrepreneurial success. we'll talk to one of the show's stars. listen to what kevin owe leery says. >> we have 30,000 applications. all small businesses all have the american dream. you should hear their stories. our leaders and politicians should talk to them. i simply vilify this whole thing. it's a huge mistake. now .75, 23.75, hold 'em. hey now do i hear 23.75? 24! hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and .75! 25! now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter -
i love what i hear. i would like nothing for half at twiets the equity. >> 230 i will give you but i want 20% for that. >> dana? >> you know what, this is a very tough decision for me to make because you remind me of me. but i would need 50% of the company. and if you want to go in half, we'll go half on it, but i would also need to see orders, real orders, because how are your customers paying at the moment? >> on the wholesale side it's
cash, cash customers. >> cash in this economy is going to dry up. >> well, i certainly understand what you're saying, sir. i recently read an article in a magazine and it talked about seven of the industries for the recession is comfort foods. you go get something that makes you feel better. that's what mr. todd's -- >> stop for a second. who doesn't love pie? >> so you think you have what it takes to be a successful entrepreneur and swim with these sharks? our next guests put big money behind the business ideas on "shark tank" on tuesdays, 8:00 p.m. eastern. joining us is robert herjovec group. did i get right? >> very good. >> also author of "the will to win." this is great stuff. one of your colleagues who has a clip before this thing, he's saying -- >> kevin. >> kevin. the government vilifies the
values and the basis and the regulations and the taxes are too steep on entrepreneurs. do you agree with that? >> i think kevin has an opinion and that's his opinion on everything. i think there's a balance. i don't think we would have survived the last great recession without help from government do you feel inhibited. some people are complaining about obamacare. some are complaining about energy. those aren't brand new entrepreneurial companies, but do you feel hemmed in by government regulations? >> no, not at all. larry, don't forget. i come from a communist country. >> where do you come from. >> yugoslavia. >> you escaped from there, you couldn't start a business. >> there's problems with obamacare. there's problems with the health act. there's problems with everything. this is the best time to start a business. >> the purpose of business is to create a customer. everything else takes care of
itself. >> everything. >> i thought the purpose of the business was to create a product and that the product then creates customers and then you're off to the races. >> how do you do that if you have a service business? >> whatever it is i'm doing. >> whether it's the restaurant business -- >> you have to create a customer. >> you can create the best product in the darkness of your basement and no one will beat a path to your door. you have to create a customer, add value, everything else follows. >> isn't that what those guys did in effect, gates and the others, they created a product in their basement or garage and then they had trouble. they had trouble marketing it. >> you know what, larry, that's the problem. there's always a guy that says bill gates did it. your odds of starting a billion dollar company in america are pretty low. your odds of starting a $5 million company on which you can make a great living, feed your family, get ahead, pay for your kid's college are very high. sure, there's always an
exception for everything. stop looking at those. look at what works. >> i don't want to give you half my equity. >> you don't have to. >> that's ridiculous. >> we see that all the time. >> that's sucking the blood out. >> that's ridiculous. who wakes up and starts a business and gives half away. >> that's no fun at all. let me ask you another thing -- by the way, i'm totally pro entrepreneurial and free market zone with you on this, but what about failure? what role does failure play in an entrepreneur. why do people have to fail, pick themselves up and go on? >> you're never a failure until you give up. there is no failure until you accept that you're a failure. just a course change. you know, the path to somethiucs never a straight line. it's a lot of ziging and zagging. the success for one is whoever
gets up fastest the next day. >> that's part of the steve jobs story. had he to fail before he could succeed. everybody's failed. everybody has failed including me. >> you're absolutely right. >> trust me, i'm married for 23 years, i hear it all the time. >> i like it. 36 for m 26 for me. "shark tank" is up next. thanks for watching. be back tomorrow evening. so i c an reach ally bank 24/7, but there are no branches? 24/7. i'm sorry, i'm just really reluctant to try new things.
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we're here to help you turn your dream into a reality. (manself-made investorsrks-- worth billions.ul, tonight they will make or break the dreams of hopeful entrepreneurs. ♪ in the tank, the sharks are ready to invest using their own money, but only for the right person with the right idea. we put all our blood, sweat and tears into that company. don't cry about money. it never cries for you. in the worst economic times since the great depression, the sharks are the last chance for entrepreneurs to get the financial backing they desperately need. the offer's $1 million for 10%. what?! (laughs) why are you being so greedy? i've made you a good offer. what are you gonna do about it? do you want it? (gasps) who are the sharks?